ASC 718-10-55 · Option pricing

Black-Scholes fair value for employee stock options

The six assumptions you have to disclose, and the grant-date fair value they produce. Nothing to sign up for.

Assumptions Edit any value

Fair value of underlying share
$
Strike
$
Not contractual term
yrs
Annualized
%
Term-matched Treasury
%
Zero if none expected
%

Grant details

Shares underlying the award
Straight-line service period
yrs

Output Updates as you type

Grant-date fair value

Single-award illustration, Black-Scholes-Merton

Weighted-average fair value per option $0.0000
Total compensation cost
Options granted—
Fair value per option—
Total grant-date fair value—
Straight-line expense attribution
YearExpenseCumulative
Show the calculation

C = S·e−qT·N(d₁) − K·e−rT·N(d₂)

d₁ = [ln(S/K) + (r − q + σ²/2)T] ÷ σ√T    d₂ = d₁ − σ√T

d₁—
d₂—
N(d₁)—
N(d₂)—
Discounted share price  S·e−qT—
Discounted strike  K·e−rT—

What this does not do. Straight-line attribution over a single service period, with no forfeiture estimate, no graded vesting, no performance conditions, and no modification accounting. Those change the number, sometimes materially.

The workbook version

Same math, in Excel, built for an actual grant register rather than one award:

  • Multiple tranches and grant dates on one schedule
  • Graded vesting alongside straight-line, so you can see the divergence
  • Forfeiture estimate with true-up at vest
  • Footnote rollforward tables that tie to the schedule

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